Could anyone please enlighten me on these questions:

1. What is the purpose of reporting the disposal of assets
worth more than 4 times the annual exempt amount?
Would I still be taxed if my actual gains is less than
the exempt amount?

2. Do I have to report gifts received anywhere in my tax return?
For example, if my dad gave me £10,000 do I have to
declare it (and where)?

Thanks in advance!


Regards,

TG

tg wrote:

Could anyone please enlighten me on these questions:

1. What is the purpose of reporting the disposal of assets
worth more than 4 times the annual exempt amount?

Just to make them aware, and force you to check whether the gain
might be enough to generate a tax liability. The AEA is about £10k
just now, and a disposal worth more than £40k may well (but won't
necessarily) involve a gain in excess of £10k.

Of course a gain in excess of £10k would (unless neutralised by
losses elsewhere) still generate tax liability (and thus a duty to
report) even if the proceeds are less than £40k.

Would I still be taxed if my actual gains is less than
the exempt amount?

No.

2. Do I have to report gifts received anywhere in my tax return?
For example, if my dad gave me £10,000 do I have to
declare it (and where)?

No. Gifts are never taxable on the recipient, but may be taxable
on the donor if the disposal involves realising a capital gain (which
cannot be the case with cash) or if the donor dies within 7 years.

Ronald Raygun wrote:


No. Gifts are never taxable on the recipient, but may be taxable
on the donor if the disposal involves realising a capital gain (which
cannot be the case with cash) or if the donor dies within 7 years.

I thought such gifts were taxable on the recipient if the donor's estate
wasn't large enough to pay (all) the tax due.

David Woolley wrote:

Ronald Raygun wrote:

No. Gifts are never taxable on the recipient, but may be taxable
on the donor if the disposal involves realising a capital gain (which
cannot be the case with cash) or if the donor dies within 7 years.

I thought such gifts were taxable on the recipient if the donor's estate
wasn't large enough to pay (all) the tax due.

No, they aren't. The donor's estate is always large enough to pay all
the tax due, because the assets "gifted" to the recipient technically
remain part of the donor's estate.

So even if the tax man can claw back part of the "gift" to cover the
tax due, that doesn't make it taxable on the recipient. It's still
the donor (or the donor's estate) that's being taxed.

I had meant to add a rider to that effect to my previous post, but then
decided not to bother. I guess that was a mistake. :-)

David Woolley wrote:

Ronald Raygun wrote:

No. Gifts are never taxable on the recipient, but may be taxable
on the donor if the disposal involves realising a capital gain (which
cannot be the case with cash) or if the donor dies within 7 years.

I thought such gifts were taxable on the recipient if the donor's estate
wasn't large enough to pay (all) the tax due.

No, they aren't. The donor's estate is always large enough to pay all
the tax due, because the assets "gifted" to the recipient technically
remain part of the donor's estate.

So even if the tax man can claw back part of the "gift" to cover the
tax due, that doesn't make it taxable on the recipient. It's still
the donor (or the donor's estate) that's being taxed.

I had meant to add a rider to that effect to my previous post, but then
decided not to bother. I guess that was a mistake. :-)

Thanks a lot guys for your posts. They're most helpful!

Regards,
TG